In the Spotlight: Raising minimum wage is counterproductive, don't do it

Friday

Jan 10, 2014 at 8:31 PM

Ken Wills

Raising the minimum wage does two things: It keeps poor people voting for lawmakers who vote for that legislation, and it causes inflation that doesn't help those in low-paying jobs.

Businesses operate in order to make a profit for the owners and/or shareholders. In order to do that, they have to consider everything that it will cost to produce what they sell. That includes overhead, materials needed to make the goods or services, wages and profits.

If you want to sell hamburgers, you need a restaurant, utilities, cash registers and furniture. If you borrow money to buy them, you have to pay interest on it. That's overhead. Then you need buns, ground beef and condiments and someone to fry, assemble and sell the burgers. All of those people want some money for doing their part.

When the minimum wage goes up, it isn't just those at the bottom rung who get a raise; everyone above them wants to get a raise, as well. If the minimum wage goes up 20 percent, they want their wages to go up 20 percent, as well.

The owner also wants to make his normal profit, so something has to be adjusted to cover the money he has to pay out. He will try to reduce the overhead or materials cost, but if he can't, the only thing that can be done to keep the profits up and still pay the new wage is to raise the cost of the hamburger.

So everyone's wages go up and everyone is happy … until they realize that the cost of a hamburger has gone up for them as well, and they haven't gained anything. That's called inflation.

The politicians who voted for the higher wage don't care if there is inflation because people don't blame them, they blame it on those greedy companies. In fact, Sen. Jones gets more votes because he "really cares about poor people" and so they vote for him again, not realizing that he is the one who is responsible for causing the price of everything to go up. It is a never-ending, vicious cycle and nobody wins except the politician who gets to keep his or her job.

So since there is no real benefit to the guys on the bottom economic rung, it is time to get off the minimum wage roller coaster. Let's leave it where it is.